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Using Grey Relational Analysis with Entropy to Predict the International Financial Center of China

Author

Listed:
  • Jiang Hang

    (Ph.D. Program in Business, Chung Yuan Christian University, Chung Li Dist., Taoyuan City, Taiwan, China)

  • Lin Jan-Yan

    (Department of Business Administration, Chung Yuan Christian University, Taoyuan City, Taiwan, China)

  • Jiang Peng

    (Department of Business Administration, Chung Yuan Christian University, Taoyuan City, Taiwan, China)

Abstract

The establishment of the China Pilot Free Trade Zone (FTZ) has significantly promoted international trade, financial development, and economic growth. Building international financial centers (IFCs) satisfies the demand for FTZs to facilitate financial development, as well as promoting economic growth. Thus, successfully predicting the next IFC in China under the FTZ framework is an important issue. In this study, we applied grey relational analysis combined with entropy method to predict potential IFCs among seven FTZ cities. According to the results, our interesting findings include: 1) the “total stock turnover”, “total value of imports and exports”, and “Foreign Direct Investment (FDI)” are key indicators for determining future IFCs; 2) among seven cities, Shenzhen and Tianjin are highly likely to become the next IFCs, while Shanghai is already an IFC.

Suggested Citation

  • Jiang Hang & Lin Jan-Yan & Jiang Peng, 2017. "Using Grey Relational Analysis with Entropy to Predict the International Financial Center of China," Journal of Systems Science and Information, De Gruyter, vol. 5(1), pages 88-96, February.
    • Handle: RePEc:bpj:jossai:v:5:y:2017:i:1:p:88-96:n:6
    DOI: 10.21078/JSSI-2017-088-09
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    References listed on IDEAS

    as
    1. Lin, Sue J. & Lu, I.J. & Lewis, Charles, 2007. "Grey relation performance correlations among economics, energy use and carbon dioxide emission in Taiwan," Energy Policy, Elsevier, vol. 35(3), pages 1948-1955, March.
    2. Ross Levine, 1997. "Financial Development and Economic Growth: Views and Agenda," Journal of Economic Literature, American Economic Association, vol. 35(2), pages 688-726, June.
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